Saturday, March 30, 2013

John Mauldin – Investors Ask What’s Going To Happen To Me?

from King World News
Today John Mauldin told King World News that investors have to be very careful going forward in the aftermath of what has just taken place in Cyprus. Mauldin, who is President of Millennium Wave Securities, also spoke about gold and what investors need to do now to protect themselves.
Eric King: “John, I have to ask you about this Cyprus disaster and the fears all over the world now that theft of bank deposits has become a reality?”
Mauldin: “It (Cyprus) seems to be on everybody’s mind and for good reasons. This was not expected. And I really think the EU was pretty ‘ham-handed’ (in how they have handled this crisis). There was an implicit, it wasn’t explicit, it wasn’t in the rules, but there was an implicit understanding among everybody that 100,000 euros was sacrosanct.
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World War - QE III...The world is in a Currency World War...MUST WATCH!

In this video you will hear James Rickards the author of Currency wars describe the devastation the last 2 world financial war's caused and how world government's are NOW fighting what will be the most destructive war in history. This was originally made as a financial advice video. He tells how the Federal Reserve and Capitol Hill have intentionally launched a currency war against China, Iran, and much of the world and how they are now retaliating. I know a few " Troofers" will say " Don't listen he works for the Government etc etc, that is exactly why you should listen to him - He is first of all a financial adviser and yes the U.S government has been a client of his. This interview is part of the advice he is now giving to clients on how to "Ride" out the coming storm. When he broke this news last year it sent huge waves of shock through the financial world. - but for some reason the general public are still not very aware of this. - I think this information needs to be put out everywhere. Unfortunately YouTube limit me to 15 min clips (Censorship) so the interview has been heavily edited for upload.

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One of Buffett's Favorite Market Indicators is Flashing Red

What are stocks worth?
It's a loaded question. Any stock can appear overvalued or undervalued depending on which valuation metrics you use.
The same logic applies to the broader stock market. Right now, some think the market is undervalued as the U.S. economy appears poised for a solid long-term upturn. Others think we're headed for a market downturn as the Federal Reserve winds down its aggressive liquidity-boosting efforts.
#-ad_banner-#Yet by at least one measure, which happens to be a favorite market gauge for Warren Buffett, the market has just become overvalued.
The economy and the market
Buffett thinks the value of all stocks in the Wilshire 5000 Total Market Index should be worth fewer than the U.S. gross national product (GNP). The GNP stood at $16.13 trillion at the end of 2012, according to the Bureau of Economic Analysis. Well, the Wilshire 5000 hit that mark on March 4, and has subsequently risen to $16.57 trillion. That difference may seem trivial, but history tells us the gap should be seen as a sell signal.
The Wilshire 5000 index was created in 1974 to capture the total value of the 5,000 largest companies on the various U.S. stock markets. (An aside: The steady attrition of publicly-listed companies during the past decade means there are now fewer than 5,000 companies in the index.)
Since the advent of the Wilshire 5000, it has exceeded the value of the U.S. GNP on only two occasions: 1998 and 2007. In each case, the market rose yet higher but eventually tumbled sharply. In fact, after the threshold was crossed in 1998, the market rose another 40%. Nonetheless, the market eventually stumbled so badly (as the Wilshire 5000 fell a hefty 40% from its March 2000 peak) that investors had a right to be nervous throughout the latter stages of that rally.  (more)

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Bloomberg Game Changers: Mark Zuckerberg

Bloomberg Game Changers” follows the career of Mark Zuckerberg, founder and chief executive officer of Facebook Inc. and one of the world’s youngest billionaires. This program features interviews with Tyler Winklevoss, Cameron Winklevoss and Divya Narendra, who accused Zuckerberg of stealing their idea for the social-networking website, Yuri Milner, chief executive officer of Digital Sky Technologies, Michael Wolf, former president and chief operating officer of Viacom Inc.’s MTV Networks, and David Kirkpatrick, author of “The Facebook Effect.”

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Gold Charts

On March 15, our computer models generated a cycle low signal for the weekly chart of gold, indicating that the latest intermediate-term cycle low (ITCL) was likely in place. Price behavior during the last two weeks has confirmed that a new intermediate-term cycle is in progress.
In September 2011, our computer models predicted the likely development of a long-term correction in the gold market. The top formed as anticipated and the subsequent correction developed into a consolidation pattern that favors an eventual resumption of the secular bull market from 2001. However, the current intermediate-term cycle faces an important test and market behavior during the next several weeks could provide a meaningful signal with respect to long-term direction.
The short-term cycle has maintained a bearish translation for the past several months. However, a cycle low signal was nearly generated today, indicating that the latest short-term cycle low (STCL) may have formed during the previous session, and the short-term cycle is on the verge of transitioning to a bullish translation.
Technical indicators on the daily chart are effectively neutral overall, suggesting that direction is in question as prices hold above previous lows of the downtrend from October.
Our Gold Currency Index (GCI), which tracks the intrinsic value of gold as an international currency, is also holding near comparable short-term highs. However, a slight positive divergence has developed between the GCI and gold in US dollar terms. Notice that the GCI momentum indicator (MACD) has moved into positive territory, while the gold momentum indicator remains in negative territory. As longtime readers know, divergences between the GCI and gold in US dollar terms usually forecast the direction of the next meaningful move, so the slight positive divergence is a bullish short-term development. It will be important to monitor this divergence during the next several sessions.
The consolidation formation in gold is undergoing an important test and a meaningful signal with respect to long-term direction could occur during the next several weeks. Therefore, it will be important to monitor the character of the rebound off of the last ITCL closely.
Best Regards,
Erik McCurdy
Senior Market Technician
Prometheus Market Insight
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What We Are Now Seeing Is Unprecedented In World History

from King World News
Today Egon von Greyerz warned King World News that the choase we are seeing right now is unprecedented in world history. Greyerz, who is founder of Matterhorn Asset Management out of Switzerland, also cautioned “The confluence of these cycles will cause unimaginable turmoil in the future.” Below is what Greyerz had to say in this remarkable interview:
Eric King: “Clearly the banks in have reopened in Cyprus, your thoughts in the aftermath of all of this?”
Greyerz: “Eric, they have opened, but the problem is still there. Banks still don’t have enough money. The package which has been put forward by the Troika is not going to last. If they ever, which they might not, lift the exchange controls and restrictions on Cyprus banks, then we will see a run on the banks again….
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The Great Depression- The Road To Rock Bottom

As economic collapse takes its toll on America, farmers protest; mortgages are called in by banks; robberies increase dramatically; and in the summer of 1932, the U.S. Army is called in to quell the Veterans' Bonus March on Washington DC.
when the dollar is worthless. None of this is going to last. This will be a complete and total collapse, even worse than what people experienced during the Great Depression. At least in a deflation, prices fall and your currency gains purchasing power. We will get prices rising astronomically and the total destruction of our currency via hyperinflation. And the government will lie and blame it all on capitalism, of course. Hyperinflationary depression is rapidly approaching and will create suffering on the American landscape the likes this country has never experienced before....including the Great Depression! The real criminals then were the "central banks" and they are the real criminals now as well! The Federal Reserve and the other central banks are nothing more than a financial criminal syndicate fleecing the people for their hard earned money for their own greedy purposes!

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Friday, March 29, 2013

Canadian Government Outlines Plans to Seize Private Bank Accounts?

[Ed. Note: Look at the financial statements of any Canadian bank. The largest liability on their books is 'Interesting Bearing Deposits.' Connect the dots...]
from Government of Canada
Chapter 3.2: Helping Manufacturers and Businesses Succeed in the Global Economy [...]
Establishing a Risk Management Framework for Domestic Systemically Important Banks [...]
The Government proposes to implement a “bail-in” regime for systemically important banks. This regime will be designed to ensure that, in the unlikely event that a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital. This will reduce risks for taxpayers. The Government will consult stakeholders on how best to implement a bail-in regime in Canada. Implementation timelines will allow for a smooth transition for affected institutions, investors and other market participants. [...]
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The Stock Market Crash of 1929: PBS Documentary

Watch The Crash of 1929 on PBS. See more from American Experience.

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The Perfect Emerging Markets Portfolio

Although the previous decade heralded the arrival of the BRIC (Brazil, Russia, India and China) nations, the current decade has a new class of emerging markets favored by investors. In fact, those markets, which are also known by a handy acronym -- CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa), have outperformed the BRICs in recent years.
I looked at the CIVETS nations [1] in the summer of 2010 and here is how they have performed since.

  (Market returns as measured by a leading country-specific ETF.)
At the time, I suggested investors steer clear of Egypt, and this portfolio would have gained 16% if Egypt were excluded, outperforming the BRICs by 23 percentage points or by nearly 10% on an annualized basis.
Forget emerging markets?
Yet in that time frame, the S&P 500 has gained a robust 49%. In effect, you would have been wise to simply ignore foreign markets during the past few years and save yourself a lot of trouble. But that's not the way this period should be viewed. Short-term phases of relative performance do not highlight long-term dynamics at play, as well as the opportunities for investors.
Yet the past few years have taught investors that these acronyms are helpful only to a point. The BRICs are substantial economies and hold more than roughly half of the world's population. The CIVETs can be seen as regional hubs -- countries such as Turkey and South Africa conduct a great deal of trade with their neighbors.  (more)

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Start/Buy A Business Now

from Financial Survival Network
Michael Busch has started new businesses, bought existing businesses on the market and out of bankruptcy, and is an expert on purchasing franchises. He’s helped thousands become entrepreneurs and he believes that under the current economic conditions, it’s time for you to do it. There’s lots of prep work required, but once you get started, you won’t be able to kick the habit. There’s nothing more exciting and challenging than running your own business. And it may be your only path to financial salvation.
Click Here to Listen to the Audio
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Financial Astrology: Canadian Banks at Risk?

The TSX has been very neutral since the end of January, perhaps signaling consolidation for a breakout or the eerie calm could turn into a sudden storm that no one was expecting or prepared for.  While everyone is distracted with Cyprus and Europe, Canada could have it’s own mysterious banking scandal.  Uranus is square Canada’s Sun which could bring a shock to the nations financial security near April 22nd.  With Neptune Square Canada’s natal Mars beginning March 30th there is a risk for unusual financial flows out of the country.  May 10th-11th could bring an explosion or natural disaster.

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USDA Acreage & Stocks Report Summary

The USDA issued their quarterly March 1 stocks report and first seasonal Planting Intentions Report which outlines spring planting intentions for the U.S. farmer.
Acreage Estimates (2013/14):
Corn                     97.3 mln acres (+ 0% vs. 2012)
Sorghum               7.62 mln acres (+ 22 %)
Oats                     2.90 mln acres (+ 5 %)
Soybeans                     77.1 mln acres (+ 0 %)
All Wheat             56.44 mln acres (+ 1 %)
   Winter              41.988 mln acres (+ 2 %)
   Other Spring     12.70 mln acres (+ 3 %)
Rice                       2.61 mln acres (- 3 %)
Canola                  1.65 mln acres (- 6 %)
Soybeans              77.1 mln acres (+ 0 %)
Sunflower              1.684 mln acres (- 12 %)
Cotton                  10.02 mln acres (- 19 %)

Give the current prices of Dec corn $ 5.37 1/2, it is not too surprising that we see a similar acreage number for corn in 2013/14.  What is interesting is that the southern states (AL, AK, FL, GA, KY, LA, MS, MO, NC, SC, TN, TX, VA, WV) have increased their cumulative acreage to 12.459 mln, which is 12.8 % of total U.S. acreage for corn, vs. last year which was only 11.9 %.  Prices for new crop corn were at similar levels during planting season, so I believe that we will see early bushels in Aug/ Sept coming to the market from these states (AGW with weather) from corn & sorghum acres.  Texas is expected to have 3 mln acres (+ 30 %) of milo going into the ground in 2013/14 which will compete with corn during Aug/Sept.  I believe that Sept/Dec corn spread will trend towards a carry vs. currently at 24 cent inverse.  I also believe that, assuming we get decent June weather, U.S. carryout could gravitate towards 2.0 bln bu +.

As for the wheat acres, USDA is projecting a slight increase of 2 % vs. last year for winter wheat acres. However, as we look into the HRW country, most of the heavy hitters in production like OK, TX, KS, NE, SD, MT, and CO are actually going to have fewer acres by 2.0 % at 27.400 mln.  The gain is all in the SRW country for about 24 % increase in major states like AR, IL, IN, KY, MI, MO, NC, OH, TN, and WI.  All going well with weather, I believe that spreads in the new crop months will start to widen out July-forward for both Chicago and KC.  I believe we could also see something similar in Mpls but spreads have already been widening in U/Z there for a while now, so it is somewhat limited as full carry is 26 cent vs. 9 cent carry currently.

The oilseed complex looks a little more interesting as it seems from the USDA forecasts that all competing oilseeds (including canola, sunflower, peanuts, ottonseed and soybeans) will have fewer acres overall dedicated to their production.  Soybean acres is expected by USDA to be unchanged vs. last year.  This could make a rather interesting scenario come this summer and fall in my opinion.  An already tight stocks scenario for the U.S. oilseeds balance sheet is our reality now as we have seen spreads narrow in soybeans and canola over the recent months due to smaller U.S. crop and South American logistical problems.  I still believe that spreads in soybeans and meal will continue to narrow due to tight supplies in the coming months.

Cotton acres are forecasted to reach 10 mln for 2013/14, which means I believe that cotton will probably have to travel higher in order to buy acres away from other commodities like corn & soybeans.  We have seen consistently strong export sales to China and other destinations for U.S. cotton over the last several to keep the N/Z inverse near 3.00 cent, which typically starts to erode as competing origins usually take over (i.e. Australia, Argentina and Southern Hemisphere origins).

 This has not happened quite yet, so I believe we will continue to see cotton travel higher and spreads narrow.

For all intents and purposes, it seems that the stocks report for grains was bearish as the numbers came out this morning as final results were higher than market expectations-
CORN               5.398 bln bushels
SORGHUM        91.391 bln bushels
ALL WHEAT      1.234 bln bushels
SOYBEANS       0.999 bln bushels

Still what was interesting is that the K/N in corn held its ground very well.  I still believe that nearby corn and soybean spreads will hold their ground currently as farmers will probably, in my opinion, shut off the selling spicket with this downdraft in corn and soybean prices.

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Thursday, March 28, 2013

The Euro is DEAD – Long Live the Cyprus POUND

Martin Armstrong, (ArmstrongEconomics)

I have gotten off the phone with contacts in Cyprus. Everything is getting very scary. Politicians in Brussels and Germany are clueless. They assume that since they have the power to enact a law, the people will just follow it without repercussions. It does not work like that and they have crossed the line into the realm of all bets are off.
The real number is 50% of whatever you had at the Bank of Cyprus will be gone. Russians are threatening bank managers. Riots are brewing. We are looking at the breakdown of a nation in modern times thanks to European politicians who have their head at least in the sand if not up their ass.
They have NO understanding of reality. Their lives are not at stake. Do you really want to be a branch manager of a local bank in Cyprus tomorrow or even a clerk? They are suppose to open but there will be no cashing of checks and the only thing they will do is allow you to withdraw €300. So the banks will not really be open.
Cyprus pound
Cyprus must make a choice. Follow the nonsense from the ECB, Brussels and Germany, or abandon the Euro, stay within the EU like Britain, create a new currency, and then create a public utility for the gas reserves whereby you can swap out into shares. Unless Cyprus abandons the Euro, it will enter a dark age for its financial sector will never rise again and the economic decline will be massive with job loss at record levels. As unrest rises, there goes any hope of tourism. This will be a spiral that Cyprus cannot afford. It is decision time. The Euro is DEAD! Long live the Cyprus POUND!

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Bollinger Band Width Hits 12 month Low for Netflix: NFLX

The noose is tightening as indecision reigns supreme for Netflix. After more than doubling, the stock moved into a tight range the last two months. Notice that BandWidth is below 7% as the Bollinger Bands narrow. The range break will deliver the next signal. An upside breakout at 195 would be bullish, while a downside break at 175 bearish.

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McAlvany Weekly Commentary

David Walker: No Grand Bargain Would be a Crime

About This Week’s Show:
-2013: The critical year
-Cancel Vacation: No Deal, No Break!
-A four letter word in Washington: “MATH”
- Order Comeback America: Click Here
-  and 
About the Guest: David Walker is the Founder and CEO of the Comeback America Initiative (CAI). In this capacity he leads CAI’s efforts to promote fiscal responsibility and sustainability. Prior to assuming his current position, he served as the first President and CEO of the Peter G. Peterson Foundation. Previously, Dave served as the seventh Comptroller General of the United States and head of the U.S. Government Accountability Office (GAO) for almost ten years (1998-2008).

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How To Get Rich Cheating

How To Get Rich Cheating by totalinvestor

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Three simple steps to get out of debt once and for all

From Financial Mentor:

Are you sick and tired of credit card bills?

Are you ready to discover how to get out of debt once and for all?

If you want a permanent debt solution then I have shocking news for you: Debt is not a financial problem. Hard to believe, but true.

Debt is actually a personal problem masquerading in financial clothing to deceive you. That is why so many people have persistent problems with debt. They look outward for financial solutions when the true solution is found by looking inward.

In this article I will clearly define the source of all your debt problems and provide a simple three-step solution so you can get out of debt once and for all...

Defining your debt problem correctly is critical to solving it.

That is where most debtors run into trouble. They mistakenly define debt as a financial problem thus developing financial solutions. That is why their debt returns shortly after paying it off. They fail to identify the root cause of debt opening the door to repeating the vicious cycle... Read full article...

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The Global Elite Are Very Clearly Telling Us That They Plan To Raid Our Bank Accounts

The Global Elite Are Very Clearly Telling Us That They Plan To Raid All Of Our Bank Accounts / By Michael Snyder 

Don’t be surprised when the global elite confiscate money from your bank account one day.  They are already very clearly telling you that they are going to do it.  Dutch Finance Minister Jeroen Dijsselbloem is the president of the Eurogroup – an organization of eurozone finance ministers that was instrumental in putting together the Cyprus “deal” – and he has said publicly that what has just happened in Cyprus will serve as a blueprint for future bank bailouts.  What that means is that when the chips are down, they are going to come after YOUR money.  So why should anyone put a large amount of money in the bank at this point?  Perhaps you can make one or two percent on your money if you shop around for a really good deal, but there is also a chance that 40 percent (or more) of your money will be confiscated if the bank fails.  And considering the fact that there are vast numbers of banks all over the United States and Europe that are teetering on the verge of insolvency, why would anyone want to take such a risk?  What the global elite have done is that they have messed around with the fundamental trust that people have in the banking system.  In order for any financial system to work, people must have faith in the safety and security of that financial system.  People put their money in the bank because they think that it will be safe there.  If you take away that feeling of safety, you jeopardize the entire system.

So exactly how did the big banks in Cyprus get into so much trouble?  Well, they have been doing exactly what hundreds of other large banks all over the U.S. and Europe have been doing.  They have been gambling with our money.  In particular, the big banks in Cyprus made huge bets on Greek sovereign debt which ended up failing.

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MARC FABER: Not Even Gold Will Be Able To Save You From What Is Coming

Marc Faber, who authors the Gloom Boom & Doom newsletter, is usually pretty bearish on stocks and bullish on gold.

Lately, though, gold doesn't seem like it can catch a bid.

"Despite the continued reverberations regarding the Cyprus bailout and its involvement of bank deposits, gold struggled to maintain the positive momentum created in the first two weeks of March and instead now looks very likely to move lower, towards $1580/oz," wrote Deutsche Bank commodities analyst Xiao Fu in a note this morning.

So, what does Faber have to say about it?  (more)

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Wednesday, March 27, 2013

Is This The Diabolical “Master Plan” Behind Crushing Europe’s Depositors

from Zero Hedge:
Last week, when we commented on the absolutely idiotic Eurogroup proposal (now voted down and replaced by an equally idiotic “bank resolution” proposal which will see uninsured deposits virtually wiped out) to tax uninsured and insured deposits, we jokingly suggested that this may be merely the latest ploy by the legacy status quo to achieve one simple thing: force depositors across the continent (and soon, world) to pull their money out of a malevolent, hostile banking system and push that money into stocks, or simply to spend it. This would help finally defeat the biggest bogeyman of the centrally-planned reflation attempt in the past 4 years – the absolutely dismal velocity of money which drops every time the G-7 central planners inject liquidity into stocks.

We were joking, because it would be beyond conspiratorial to suggest that a central bank could go as far as wiping out the wealth and savings of an entire nation in order to promote broken monetary policy. It would be outright idiotic and not to mention criminal. Why purposefully endanger depositors, and thus an entire financial system, just to spook them and their money? Or so we thought until we read the following just as “conspiratorial” take from Deutsche Bank’s Jim Reid:
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Biggest 3-Day Surge In 8 Months Drives Oil To 5-Week High On No News / By Tyler Durden /

It would appear, all else being equal, that the algos have found a new leverage asset to save stocks. Given the uncertainty in Europe, EURUSD and EURJPY have lost their effectiveness; Treasuries won’t play along due to the safety bid and Fed footprint; high-yield won’t budge as fundamentals are making people nervous; and even VIX won’t shift as protection is sought. So it seems, given the entire lack of any fundamental reasoning for today’s move, that WTI crude is the asset of choice to ramp correlations with stocks higher. This last 3-day push is the biggest move in WTI since August of last year as it pushes back towards the year’s highs (and RBOB is following suit) – not exactly boding well for the price at the pump shortly.
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One of The Greatest Investment Opportunities of a Generation: HEK

It's official. According to the International Energy Agency (IEA), the United States could be the world's largest oil-producing country in the next seven years.

Based on the report, the United States could surpass all other countries in oil production by 2020. And 10 years later, the country could be energy-independent.

Talk about your 180-degree turnarounds.

For the past several decades, the United States has depended heavily on imports to feed its 19-million-barrel-per-day oil habit. In fact, about one out of every five barrels the United States consumes each day comes from a foreign country.
But if this forecast is accurate, then the United States production could eventually outpace domestic consumption. So instead of bringing in oil, we could be shipping it out.

Is this plausible? You bet it is.

In fact, the whole scenario sounds eerily similar to what has happened in the natural gas market. A decade ago, every credible analyst was convinced that the United States was running out of gas, and energy companies spent billions to construct import terminals.  (more)

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Profit Potential in Energy

by Marin Katusa, Casey Research:
In an interview with ProactiveInvestors, Chief Energy Investment Strategist Marin Katusa provides a succinct overview of the short-term outlook for various energy sectors, plus how to evaluate specific companies.

Economic and political winds have buffeted the energy sector lately. Is the US really poised to become energy independent? Is uranium on again, or off? How will North American oil sands production change the oil sector? It’s hard to know which will turn out to be the best energy plays of the year, but a savvy investor can position himself for maximum profits.
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Copper a red flag for global economy

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Five Mining Companies that Meet Jamie Mackie's Success Criteria

The Gold Report: Investing in mining equities is a cyclical play. Are we at a point in the cycle for investors to return to mining equities?

Jamie Mackie: I think the gold mining stocks are at or near the bottom. Research from the Ned Davis Research Group shows that pessimism is extremely high—typically an indication that we are close to a bottom. From our perspective, that is the best time to position yourself. Once the market begins to turn, it will happen rapidly. Investors need to recognize value and get in reasonably early to avoid paying up later.

I compare the situation to being at a huge party; the party being the blue chip, dividend-paying sector. The party has been going on for quite a while, and it is hard to leave the party and sit in a room all alone. But that is what investors should do, spend time in the room alone, waiting for others to join them.

TGR: From a wealth-building perspective, how do mining equities fit in a world that is deleveraging?

JM: Your choice of the word deleveraging is interesting because I would say the world as a whole is not deleveraging.  (more)

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World Ex-US Mostly Oversold

by Bespoke Investment Group
Below is an updated look at where the S&P 500 and its ten sectors currently stand within their normal trading ranges.  In the table below, the red shading represents overbought territory, while the green shading represents oversold territory.  The black vertical “N” line represents each sector’s 50-day moving average.

As shown, the S&P 500 and six of ten sectors remain in overbought territory, with Consumer Staples the most overbought.  Nine of ten sectors are above their 50-day moving averages.  The Materials sector has moved solidly below its 50-day with today’s declines.

Interestingly, while the US remains on solid ground, the rest of the world has been struggling.  Below is our trading range screen run on the 30 largest country ETFs.  As shown, 14 of the 30 countries are actually in oversold territory, while just two (Japan and the US) are overbought.  Brazil is the most oversold, while countries like Spain, Columbia, India, South Africa and Taiwan aren’t far behind.  In late 2012, it was the US that struggled while the rest of the world rallied.  That trend has completely reversed as the first quarter of 2013 comes to an end.

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Jim Sinclair – Historic Events Are Unfolding Right Now

from KingWorldNews:
Today Jim Sinclair spoke with King World News about the historic events which are taking place, the unfolding drama in Cyprus, and bank runs in Europe. Below is what Sinclair, who was once called on by former Fed Chairman Paul Volcker to assist during a Wall Street crisis, had to say.

Eric King: “Jim, this is a quote from your March 20th KWN interview”:
“Cyprus cannot, will not, absolutely must not leave the euro. They know that quite well. So the break of the euro market down into the 1.28 area must have sent shock waves through decision-makers in euro land. Cyprus must be rescued because they cannot be allowed to leave the euro.”

Again, you said that 5 days ago and that was incredibly accurate.”
Jim Sinclair continues @

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Tuesday, March 26, 2013

David Morgan “When you have money in a bank, you have a risky investment”

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John Embry: Cyprus, Massive Global Debt, Derivatives & The End Game

from King World News
Today John Embry told King World News that what is happening in Cyrpus is just a prelude to a more catastrophic day when the financial system grinds to a halt. He says the Cyprus disaster has frightened people all around the world and things will only get worse from here. Below is what Embry, who is chief investment strategist at Sprott Asset Management, had to say regarding this ongoing crisis:
Eric King: “In the aftermath of what they are saying is a deal in Cyprus, John, what are your thoughts?”
Embry: “We knew they would come back with another solution because they can’t afford for a country as small as Cyprus to bring down the whole euro construct. I think people recognize that Germany has a vested interest in keeping this thing afloat because their banking system is loaded with all of this peripheral country debt.
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VIVUS, Inc., a biopharmaceutical company, engages in developing and commercializing therapies to address unmet needs in obesity, sleep apnea, diabetes, and sexual health. The company offers Qsymia, a drug for the treatment of obesity as an adjunct to a reduced-calorie diet and increased physical activity for chronic weight management in adult patients with an initial body mass index of 30 or greater, or 27 or greater in the presence of at least one weight-related comorbidity, such as hypertension, type 2 diabetes mellitus, or high cholesterol; and STENDRA for the treatment of erectile dysfunction. It also completed Phase II clinical studies of Qsymia for the treatment of obstructive sleep apnea; and Qsymia for the treatment of type 2 diabetes. The company has an agreement with Mitsubishi Tanabe Pharma Corporation for the development and commercialization of avanafil, a PDE5 inhibitor compound for the oral and local treatment of male and female sexual dysfunction. VIVUS, Inc. was founded in 1991 and is headquartered in Mountain View, California.
To analyze the company's stock for potential trading opportunities, please take a look at the 1-year chart of VVUS (VIVUS, Inc.) below with my added notations:
1-year chart of VVUS (VIVUS, Inc.) Similarly to yesterday's “Big Stock”, VVUS has been trending sideways for the last (5) months. As the stock has bounced along, it has formed a couple of key price levels to watch. The first is the $10 level (blue) that has already acted as support on several occasions. The other is the $12 level (red) that VVUS is currently pulling away from.
The Tale of the Tape: VVUS appears to be on its way back down to $10. A long position could be entered at the $10 support or on a break above the $12 resistance, with a stop placed below the level of entry. A short play could be made on a break below $10 or on a rally back up to $12.

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The Falling Knife of Mining Stocks Has Hit the Floor: John Doody

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Weimar Hyperinflation 1923 vs USA Today

In a short but powerful documentary of 6 minutes, our friends at FutureMoneyTrends show the similarities between the hyperinflationary period in the Weymar Republic in 1923 / 1924, and the USA today. The similarities in the pre-hyperinflationary period appear to be striking! In a nutshell:
  • The national debt had risen to a point where it could not realistically be paid back.
  • The war had costed more than expected.
  • There was a high unemployment.
  • Products and services increased in price, while production decreased significantly.
  • The government’s response was to provide liquidity to the banks and inflate the currency.
  • The gold standard was left several years before.
Going forward, we strongly advice everyone to study what the documentary tells at the 6 minutes mark.
The only thing keeping the dollar afloat is a military bravado that keeps countries of the world inclined to use the dollar has a reserve currency. If that changes along with increasing deficits and diminishing public support for military interventions, we may see German style hyperinflation in the United States of America.
As soon as the world witnesses the loss of trust in the US dollar (the world reserve currency), the financial and monetary system will  implode under its own weight. The sad truth is that our beloved leaders are kicking the can down the road for several years, arguing that nothing is going now.

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Dutch Finance Minister Loves Raiding Savings Accounts / By Dan Norcini / 

Reuters is reporting this morning comments from the Dutch Finance Minister, Jeroen Dijsselbloem, who by the way heads up the group of European Finance Ministers, to the effect that the “solution” in Cypress is a “new template” to address future banking problems in the Euro area.
I want you readers, particularly those of you in the Eurozone,  to wrap your heads around this and consider the brazen audacity displayed by these people. What he is saying is that bank savings deposits no longer effectively belong to you the savers. They belong to the state and the state will confiscate them whenever it is deemed to be in that state’s best interests.
If this does not send shock waves throughout the system and instill fear in individuals throughout the Eurozone, then there is no hope for any such people. Normal, rational, sane, thinking individuals will immediately recognize this for what it is; a complete reversal of the traditional role of banking in which banks makes loans to depositors and other individuals. Now, depositors are in effect making loans to banks. Yet even that is not an apt comparison for in the case of a loan, one usually expects to receive back the amount loaned plus interest. In this case, the depositors are having their money forcibly extracted from them with no hope of ever seeing it again and having that money used to bail out the banks instead! I never believed I would EVER witness this in my life and yet here it is. What is even worse is the blasé attitude displayed by the monetary authorities. Just who in the hell do these people think that they are?

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Chart of the Day - Seattle Genetics(SGEN)

The Chart of the Day is Seattle Genetics (SGEN) and was found by sorting the Barchart New High list for frequency then using the Flipchart function to review the charts.  In the last month the stock rose in 17 session for a gain of 29.63% and has a Trend Spotter buy signal.  It has great fundamentals for next year.

The Company develops monoclonal antibody-based drugs to treat cancer and related diseases. Using its monoclonal antibody-based technologies and its expertise in cancer, they have assembled a portfolio of drug candidates targeted to many types of human cancers.

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Monday, March 25, 2013

Are We Near A Stock Market Selloff?

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Bankrate Inc (NYSE: RATE)

Bankrate, Inc. publishes, aggregates, and distributes personal finance content on the Internet. The company distributes its content and rate information through its online network consisting of, its flagship Website that aggregates rate information on approximately 300 financial products, and other personal finance Websites; provides Web services to approximately 75 co-branded partners comprising personal finance sites on the Internet; and licenses editorial content to approximately 100 newspapers on a daily basis. Its products and services include providing information on rates for various types of mortgages, home lending, and refinancing options; original articles that cover topics, such as trends in housing markets and refinancing perspectives; and rate information on various deposit products that comprise money market accounts, savings accounts, and certificates of deposit, as well as online analytic tools to calculate investment value using customized inputs. The company also offers insurance quotes for auto, business, home, life, health, and long-term care. In addition, it provides credit card information and comparison capabilities, and allows consumers to search for cards; and information on retirement, taxes, auto, and debt management.
To analyze Bankrate's stock for potential trading opportunities, please take a look at the 1-year chart of RATE (Bankrate, Inc.) below with my added notations:
1-year chart of RATE (Bankrate, Inc.) RATE has been trending sideways for the last (5) months. As the stock has bounced along, it has formed a couple of key price levels to watch. The first is the $10 level (blue) that has acted as support on a couple of occasions. The other is the $12 level (red) that RATE is currently trading just above and should act as support on any pullbacks.
The Tale of the Tape: RATE's main level to watch at this time is $12. A long position could be entered at the $12 support with a stop placed below that level. A short play could be made on a break below $12 with an expectation of a fall back down to the $10 level.

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Sprawling and struggling: Poverty hits America's suburbs

WEST HARTFORD, Conn. – Like many Americans who move to the suburbs, Tara Simons came to West Hartford because she wanted her daughter to grow up in a nice, safe place with good schools.

Her fall from a more financially secure suburban life to one among the working poor also happened for the same reason it’s happened to so many others. She had a bout of unemployment and couldn’t find a new job that paid very well.

As a single mother, that’s made it hard to hold on to the suburban life that is, in her mind, key to making sure her daughter gets off to the right start.

“I’m basically paying to say I live in West Hartford,” she said. “It is worth it.”

It’s a struggle that many Americans bruised by the weak economy can relate to.

The number of suburban residents living in poverty rose by nearly 64 percent between 2000 and 2011, to about 16.4 million people, according to a Brookings Institution analysis of 95 of the nation’s largest metropolitan areas. That’s more than double the rate of growth for urban poverty in those areas.  (more)

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Who Is Buying U.S. Treasuries?

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Paul Craig Roberts: Triple Bubble Implosion Coming

Paul Craig Roberts former head of policy at Department of Treasury under Reagan, and the editor at The Wall Street Journal, founder of Institute for Political Economy, and prolific author. We speak about the crashing economy and why it is collapsing, austerity, corruption, Greece, the IMF, and Paul explains some of the complexities of the ill fated money system that is destroying us. Dr. Paul Craig Roberts says, "It's not just unconstitutional, murder is illegal." When it comes to drone strikes on U.S. citizens suspected of terror, everyone should be concerned. Roberts says, "Now the principle is if the government says you are guilty, you are—period. No evidence is needed for your termination." Join Greg Hunter as he goes One-on-One with Dr. Paul Craig Roberts.

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Fitch poised to cut UK's AAA rating soon

(Reuters) - Britain looked poised to lose its AAA rating from a second ratings agency after Fitch Ratings warned on Friday it was likely to downgrade the country in the coming weeks, citing high government debt levels and weak growth.

A month since Britain was downgraded by Moody's, Fitch put the country on review and said a downgrade was a heightened possibility. A decision is due by the end of April, Fitch said in a statement.

Sterling fell sharply, dropping half a cent against the dollar.

The review announcement comes hard on the heels of the government's annual budget this week, which halved Britain's growth forecast for this year and raised borrowing projections.

The move by Fitch was not unexpected but will be another setback for finance minister George Osborne. He has staked his reputation on repairing Britain's public finances and had promised to protect its triple-A rating.

Britain's finance ministry, which is three years into an austerity plan, said Fitch's announcement showed "there are no easy answers to problems built up over many years".

"But we are, slowly but surely, fixing our country's economic problems," a Treasury spokesman said, citing a reduction by one third of the budget deficit and the creation of 1.25 million jobs since the government took office in 2010.  (more)

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Is A Gasoline Price Hike Coming?

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US Weekly Economic Calendar

time (et) report period Actual CONSENSUS
MONDAY, march 25
  None scheduled        
8:30 am Durable goods orders Feb.   4.6% -4.9%
9 am Case-Shiller home price index Jan.   -- 6.8% (y-o-y)
10 am Consumer confidence March   66.0 69.6
10 am New home sales Feb.   420,000 437,000
10 am Pending home sales Feb.   -- 4.5%
8:30 am  Weekly jobless claims  3-23
340,000 336,000
8:30 am GDP revision 4Q   0.6% 0.1%
9:45 am Chicago PMI March   56.0 56.5
8:30 am Personal income Feb.
1.0% -3.6%
8:30 am Consumer spending Feb.   0.6% 0.2%
9:55 am Consumer sentiment March   73.0 71.8
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Saturday, March 23, 2013

ALERT: 900 Million Euro PUT, betting that the Euro will crash within 2 weeks, Rocks the FX Market

A EUR900 million trade rocked the London options markets this morning.
The two- week put on the euro against the U.S. dollar stood out as options trading in EUR/USD has been quiet this year due to the range-bound nature of spot, according to traders in London.

The put was struck at USD1.2800 when volatility was at 9.8%. One senior trader in London noted that recent concerns over the stability of Cyprus have now fuelled activity.

*Term Structure*
*EUR/USD*     *Fwd Rate*     *Fwd Pips*     *ATM Vol*     *25d RR*     *25d Bfly*
Spot:  1.2927/28
1W     1.29276/88     0.7/0.10     10.025     -0.95     0.15
1M     1.29298/311     3/3.2          8.975     -1.2        0.15
2M     1.29330/41      6.1/6.3        8.95       -1.35     0.2
3M     1.29359/70       9/9.2          8.95       -1.45     0.2
6M     1.29457/73     18.8/19.4     9.05       -1.6      0.25
9M     1.29570/88     30.1/30.9     9.239     -1.65     0.3
1Y     1.29679/724     41.1/44.6    9.35      -1.7       0.3
/Source: SuperDerivatives SGX/

Strategists at Credit Suisse noted that EUR/USD is likely to remain sensitive to Cyprus in the near-term. “We remain of the view that the likelihood of a systemic outcome is low, and as such maintain a medium-term bullish view on the euro.”

Martyn Harrison, fx options sales/trader at Marex Spectron in London told /DI/ EUR/USD one-year cross-currency basis swaps have rebounded from -28.9 basis points to -25 basis points following the large moves over the last couple of days.

“We see dips to 1.2806 technical support as a potential buying opportunity,” wrote fx strategists at BNP Paribas in a report. They noted that the currency pair still face significant headline risks, but
appear relatively cheap relative to the euro periphery-core bond yield spreads.

Two-week realized volatility on EUR/USD sat at 7.5% during London afternoon trading, while two-week implied was 9.3%. EUR/USD spot was USD1.2915 at press time.

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Richard Russell – Stocks, Fed & Gold Shorts To Get Squeezed

from King World News
After the Fed meeting and the Cyprus fiasco, today the Godfather of newsletter writers, Richard Russell, came out and said the gold belonging to the United States may be missing, and that gold-haters are about to pay. He also discussed Bernanke, stocks, the Fed and more. Below is what Russell had to say to subscribers:
“I just heard Bernanke’s latest interview. He said that the economy is improving, just as he had expected. And he said further, that the Fed will continue their “open spigots” policy, which includes buying $85 billion worth of assorted bonds each and every month. Plus, of course, the zero interest rate policy. And hey you poor broke slob, if you don’t like the zero policy, then go buy some stocks or better still, buy a house, because Bernanke is dedicated to driving almost everything that moves or doesn’t move, higher and higher.
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The American Dream - 2010

 All of us Americans strive for the American Dream,and this film shows you why your dream is getting farther and farther away.Do you know how your money is created?Or how banking works?Why did housing prices skyrocket and then plunge?Do you really know what the Federal Reserve System is and how it affects you every single day?You will be challenged to investigate some very entrenched and powerful institutions in this nation,and hopefully encouraged to help get our nation back on track..

We need your support to continue to fight the lying liars! It is very expensive to make this level of media and we are going to need help to keep making it! "Any donations are appreciated! Please Consider Buying a copy @

Donations and sales will help with production costs,further marketing of the film and hopefully will lead to other similar informative Films being made.


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Martin Armstrong: The 224 Year Cycle of the USA

us-224 cYCLE 2013
Copyright March 21, 2013, All Rights Reserved
by Martin Armstrong
The European Central Bank (ECB) effectively said they were unwilling to continue providing emergency liquidity to Cypriot banks and would not guarantee funding beyond Monday, unless a bailout deal emerges. This is just astonishing because tomorrow, March 22, 2013 is the end of the American Era for it is the peak in the sphere of American influence. Cyprus is being forced to invite in Russia and this will be an amazing turning point. I said at the Sovereign Debt Crisis Conference I would be stunned if something took place precisely on this daily target. It looks like this is THE event of all time and is the start of the rise of Russia to the world stage. It may be like the assassination of the arch duke that started World War I. (more)

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Picking a Junior Gold Company in a Bad Market

by Richard (Rick) Mills
Ahead of the Herd

The current investment market for junior gold companies is arguably one of the worst since the United States went off the Gold Standard in 1971.
Despite the current high price of gold (and many other commodities), investors have almost abandoned the junior gold mining sector to invest in physical bullion, ETF’s, and producing companies. The value of the TSX-Venture Composite Index, shown below, is similar to what it was in the early 2000’s when the price of gold was below US$300 per ounce.
In 2013 I expect to see the equity market in the junior gold sector begin to correct itself and investors should currently be taking advantage of the investment opportunities resulting from the severely beat up junior sector. There presently exists a great opportunity for those investors who are “ahead of the herd” and want to invest in the market at or near the bottom.
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Warehoused Asian Copper Hits Record High / By Tyler Durden /
Pardon this brief tangent from the hypnotic, sclerotic, quixotic, Cypriotic situation which will get no resolution today, or tomorrow, and may at best be resolved on Sunday night following yet another coordinated global bailout, (although our money is on a last, last minute resolution some time on Monday when Cyprus is closed but the European markets are widely open), but as it highlights a key follow up to our article from two days ago, “Dr. Copper’s Deja Vu” it is worth being aware of a rather particular problem in Asia right now. A rather well-known problem for those who have tracked the warehousing woes of assorted industrial medals in China as an indication of the true state of the Chinese economy: as of right now, the stocks of copper in Asia (as determined by deliverableLME CLS and Shanghai copper) are at an all time high and up 90% from the previous three year average.
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Notes From Jim Sinclair Meeting In New York City

Dear friends and clients of AFE,

Yesterday Jim Sinclair spent over 5 hours in a question and answer session in New York City. He covered the implications of Cyprus proposing to confiscate as much as 10% of depositor wealth directly from bank accounts, as well as his views on a wide variety of subjects related to gold.

Mr. Sinclair is a 50 year veteran of the gold markets, and one of the most respected voices in the gold community. While we do not always agree 100% with Mr. Sinclair’s views, my personal observation is that he is genuinely concerned for the well-being of others when it comes to wealth preservation through gold.

What follows is a summary of what Mr. Sinclair had to say on these issues. Please bear in mind that this is being re-constructed from hand notes. If a phrase appears in quotes, it is verbatim, otherwise I am paraphrasing.
According to Jim Sinclair:
The announcements that Cyprus put forward a proposal to force depositors to pay for bank bailouts directly has created a global uproar, and the backlash will have a substantial effect on the gold market. Sinclair considers this a major turning point in the gold market, and herald’s gold’s next major up leg.
Sinclair’s comments on various gold related subjects:
There are three phases left in this bull market. Now-2014, 2015-2017, 2018-2021
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Gerald Celente: Cyprus Looting Is Only The Beginning For Global Elite

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Friday, March 22, 2013

If I Could Only Buy One Buffett Pick, This Would Be It: VRSK

When Warren Buffett left college in 1951, he had $9,800. After 62 years of investment success, his net worth is now estimated at $53.5 billion. His wealth has increased by an average of 28.4% a year at a time when the price of the S&P 500 provided a total return of 7.1% a year.

In his career, Buffett has done well in both bull and bear markets by picking great stocks. Individual investors can turn to the annual report of Berkshire Hathaway (NYSE: BRK-A) to see exactly what Buffett is doing. Those reports include folksy wisdom from Buffett and a list of the stocks he owns. Buying and selling after Buffett initially reveals his positions would have beaten the S&P 500, according to a study done by two finance professors.

One problem with this approach is that Buffett owns a large number of stocks. In his most recent report, he noted large positions in 41 different companies and it would require a large amount of capital to own that many stocks. Another problem is that Buffett sometimes gets deals that are not available to individual traders. For example, when Buffett bought shares in Goldman Sachs (NYSE: GS) during the financial crisis, he received preferred shares with a 10% dividend yield that were not publicly traded.

There is also the question of whether the Oracle of Omaha is losing his touch after an incredible career of more than 60 years. Berkshire has underperformed the S&P 500 in three of the last four years.  (more)

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Dr. Marc Faber on the Looming Bond-Market Crash

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Pressure Building In USD/JPY Chart

Markets Expect Swift Action From Bank Of Japan
We may expect a shift toward more aggressive monetary policy from the Bank of Japan soon. Haruhiko Kuroda, the new governor of BOJ, said last week that he wants to discuss easing soon, and he mentioned in the past that he will do whatever it takes to achieve a 2% inflation goal.
Yesterday he confirmed his views during the first press conference after taking the helm of the Bank of Japan this week. He said: “We will do whatever we can to achieve the 2 percent price target at the earliest time possible”.
Even though the government doesn’t hide its plans to devalue the yen, the Bank of Japan is facing very high expectations. The Yen significantly fell during the last few months, with USD/JPY making new highs, but this run has been on the back of the talk not supported by any significant action.
The Next BOJ Policy Meeting Will Take Place On April 3rd.
On Monday BOJ announced that Masayoshi Amamiya will return to his original duty of supporting the governor on monetary policy decisions. Amamiya led the BOJ’s efforts last year to achieve a 1% inflation goal.
Both Kuroda and Amamiya believe that monetary policy alone can end the deflation that has affected the Japanese economy for the last 15 years. The appointment of Amamiya is a sign of confirmation that BOJ might be gearing up for a fresh round of easing, that can be announced during the meeting at the beginning of April. The vast majority of market participants expect BOJ to unleash asset purchases of at least 10 billion yen. Any increase in asset purchases will extend USD/JPY rally.
USD/JPY Is Trading Within A Range.
USD/JPY – 4 hour chart
We mentioned in our daily report that USD/JPY is trading within  94.439 – 96.275 range.
The pair tested the lower band of our range short time ago, before bouncing slightly. Yesterday’s high was 96.10 – the action is clearly range-bound. Our bias is still Bullish-Neutral. From the technical perspective the pair might be putting a temporary top here, but it’s too soon to tell, and highly unlikely due to strong desire of BOJ to debase its currency. We need to watch the range closely.
One of the factors that can contribute to temporary USD/JPY weakness is the end of Japanese financial year on March 31st. Traditionally Japanese companies tend to bring their profits in US dollars back into the country. This seasonal factor could lead to additional pressure on USD/JPY leading to the end of the month.
We believe that the areas around 93.67 will represent a very good buying opportunity. The repatriation of funds will be completed by March 31st, and we will expect a second wave of USD/JPY buying after that.
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Sinclair – Lagarde’s IMF Disaster Forces Bernanke Out Of Fed / March 21, 2013
Today legendary trader Jim Sinclair told King World News that Lagarde’s IMF Cyprus disaster, in stunning fashion, has now forced Chairman Ben Bernanke out of the Fed.  Sinclair, who was once called on by former Fed Chairman Paul Volcker to assist during a Wall Street crisis, takes readers on a trip down the rabbit hole that has become know as “The Cyprus Catastrophe” in this extraordinary and exclusive interview:

Eric King:  “Remarkably, just a day and a half ago you stated on King World News that ‘Putin has faced down the International Monetary Fund, which by the way is located in Washington, DC, and is in fact Washington itself.  So in the sense of a Cold War, you have Washington vs Moscow, and Moscow won this round.  The bottom line here is Lagarde took on Putin, but Putin has checkmated both her and the IMF the same way a Russian grandmaster chess player would destroy his opponent.’  Within hours of KWN reporting that news, Lagarde’s apartment was raided by police and she is now scrambling.”

Sinclair:  “The important point is, how long has this case been going on in which there was a police raid on the Lagarde’s apartment?  This is a 20-year old case, making it look a little less like just a coincidence.  I would also add to that I don’t think it’s any coincidence that the Chairman of the Federal Reserve has now indicated the possibility that he will not be reappointed, and that he will not accept the reappointment….
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Chart of the Day - Southwest Airlines (LUV)

The Chart of the Day is Southwest Airline (LUV).  The Trend Spotter signaled a buy on 11/8 and the stock is up 38% since then.  The 96% Barchart technical buy signal was earned by advancing 16 times and gaining 8.03% in the last month.

They are a major domestic airline that provides primarily shorthaul, high-frequency, point-to-point, low-fare service. Southwest operates over Boeing 737 aircraft in numerous cities.

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Ben Graham Would Love These 2 Stocks: HFC, GLW

The most successful investors have had a mentor for guidance during their formative years.
Even Warren Buffett, one of the world's greatest investors, gives credit to his instructor for his success. While it is possible to learn through experience in the stock market, having a mentor greatly shortens the learning curve.
The market is a treacherous place and learning by trial and error can be costly and destructive to your portfolio. Fortunately, investors don't need to have a personal relationship with an investing mentor to succeed in the stock market. In fact, the same educational information available to Buffett is available to regular investors like you and me.

Buffett credits economist, professor and investor Benjamin Graham as being his mentor during his learning years.

Graham had such a profound effect on the young Buffett, that he named his son Howard Graham Buffett in honor of his teacher. Only Buffett's own father had more of an influence on him than Graham.

Graham is most known as being the originator of value investing. Along with teaching the technique as a professor at Columbia Business School, Graham wrote the book "Security Analysis" to pass along his strategies to all investors. This book, along with the subsequent "The Intelligent Investor," are among the most respected writings in all of finance. (more)

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Thursday, March 21, 2013

Dow Theory Buy Signal?

by Tim W. Wood, Financial Sense:
As a result of the Industrial’s move above their 2007 high last week, there has been a lot of talk about that advance triggering a so-called Dow theory “buy signal.” First let me say that according to the original writings of Charles H. Dow, William Peter Hamilton and Robert Rhea, there is no such thing as a “buy” or “sell signal” in accordance with orthodox Dow theory. Rather, our Dow theory founding fathers would anticipate trend changes, near anticipated market tops and bottoms, based on market behavior. It was actually these areas of anticipated trend change that they referred to as “buy and sell spots.” They would then take their positions accordingly and would then use the joint price movement of the averages above or below previous secondary high or low points to either confirm or negate their suspicions of the trend change. It was then these joint movements of the averages above and below secondary high and low points that served to confirm a bullish or bearish “primary trend change” in accordance with orthodox Dow theory.
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